Posted: March 24th, 2023
Companies should strategize and position effectively in the market to target the right customers and become productive and profitable. Costco Wholesale Corporation is a retailer in the form of a membership-only warehouse club. The company offers various products, including clothing, electronics, consumer goods, health and beauty, furniture, and grocery. The unlimited product mix is an essential strategy for the business to target a larger client base and become more profitable (Courtemanche & Carden, 2014). Furthermore, the approach enables the company to maintain low prices, taking advantage of economies of scale to remain competitive in the market.
Costco has a diverse clientele in the United States and other countries, such as Canada. Besides its vast operations in these two countries, the company is improving its global services to target customers outside the region. The marketing team packages the products in bulk to sell to businesses as well as large families. As a result, the company can effectively improve its cash flow by selling larger quantities to more customers than its competitors.
Businesses should differentiate their operations to position their brands in the global market effectively. Differentiation takes various forms, including selling unique products to target more customers or using a different pricing strategy from what competitors use. Costco has implemented the procedure in two ways: selling a broad range of products and maintaining a low price compared to its competitors (Gamble, Thompson, & Peteraf, 2013). The two aspects of marketing have allowed the company to position itself effectively to meet the demands of global customers.
Differentiation plays a critical role in market growth since a company can attract more customers. For instance, when business processes are differentiated, customers would identify with the brand, become loyal, and prefer the company’s products. Consequently, the business attracts and maintains a loyal client base. The wide range of products offered has enabled Costco to target more customers both locally and globally through economies of scale (Thompson, 2017). The strategy also provides the much-needed opportunity for Costco to expand its operations to new global markets.
Rationale: Costco focuses on the economies of scale and the need to remain competitive in the market. Using a low-price strategy attracts more customers to the business, provides more profits, and improves productivity. The company stays competitive by offering customers value for their money when purchasing its diverse products (Thompson, 2017). A low price strategy for quality products is always a value-addition tool for marketers.
Rationale: Costco has an effective product mix and an opportunity to continue expanding its operations in the global market. The vibrant product mix has allowed the company to remain profitable and competitive in the local and international markets (Thompson, 2017). For example, Costco can compete successfully with Wal-Mart, which has a smaller product mix targeting fewer customers.
Place (Distribution and Channel) Strategies
Rationale: Costco is a global brand, indicating that it targets a local and global client base. Hence, besides concentrating on the United States and Canadian markets, the company should also explore the opportunities in other countries. A broader market for the company enables it to sell in larger volumes, hence maintain its low and unique pricing strategies (Courtemanche & Carden, 2014). Additionally, the approach is profitable for the company to compete successfully in the global market.
Rationale: Costco should benefit from streamlining its marketing processes for its customers, the most critical stakeholders. Value pricing and efforts to promote the brand name has created a strong reputation for the company in the United States and Canada as well as extending to the international market (Courtemanche & Carden, 2014). Furthermore, it becomes the foundation for the company’s intentions to continue its operations to the global market.
People (Staff) Strategies
Rationale: People are the most critical stakeholders in any business. Thus, by focusing on the needs and interests of employees and customers, Costco is gaining an advantage in the market. Employees are motivated to serve the customers, who in turn, are willing to buy from the company, creating a profitable mutual relationship (Courtemanche & Carden, 2014). Consequently, Costco’s performance in the local and international market continues to improve.
Rationale: promotion remains one of the most critical elements of the marketing mix since a company should do more than merely produce and wait for customers. Use of the social media in addition to the traditional promotion channels would allow the company to reach its local and global clients (Gamble, Thompson, & Peteraf, 2013). The strategy is critical amid the company’s efforts to expand to the global market. Furthermore, it allows the marketing team to reach large geographical locations even without physical locations in the international markets.
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